NEWS BT has confounded its critics by boosting profits, cutting debt and maintaining its turnover despite falling revenues from its fixed-line semi-monopoly.
Pre-tax profits for the year are up 10 per cent to £2bn and revenues are almost steady at £18.5bn.
The surprise is in how quickly BT has expanded what it calls its 'new wave': mobile, broadband and ICT. This cumulatively grew at 30 per cent for the year to £3.39bn, with the fourth quarter seeing contract wins in ICT alone worth £2.3bn.
Not all these wins are booked but BT was able to report new wave turnover of £1.08bn for the fourth quarter, up by 38 per cent.
Chairman Sir Christopher Bland said in his statement: "The group has continued to make good progress this year and delivered strong financial results while continuing to transform the business."
Bland resisted any desire to crow over BT's detractors in his statement. Given these strong results, it must have been difficult. It remains to be seen if he keeps this up when he makes the formal announcement later today in London.
Most analysts had expressed polite scepticism on BT's ability to make changes fast enough to counter the company's loss of revenue from fixed-line. Most agree, however, that the company is making the right moves.
Other highlights include cutting debt by 12 per cent to £8.43bn, achieving almost 2.5 million broadband users, boosting the dividend by 31 per cent to 8.5p per share and increasing cash flow.
The company is shedding staff through voluntary redundancies and many of the figures in its statement exclude what it calls "leaving costs". The scale of these will become evident later today.
Comments
There are 3 comments. Join the discussion
1. anonymous
This isn't the iPod story!!!!! The link on my email suggested it would be!
[Ed's note - the iPod story can be found at http://hardware.silicon.com/pdas/0,39024643,39120819,00.htm]
2. James Mackenzie
Where is the ipod story??
[Ed's note - the iPod story can be found at http://hardware.silicon.com/pdas/0,39024643,39120819,00.htm]
3. Roger P Murphy
It comes as no surprise that the greedy monolith BT has again raked in the profits. Has no one the intelligence to see why?
Perhaps most people do not bother to look at their phone bills any more, perhaps the public have become complacent.
I for one do not think BT offers value for money, they over-charge their customers as there is little real competition. It seems absurd that whist BT rakes in the profits by excessive line-rental charges, VAT charges and who knows what other fictious charges, it makes for front page news.
If it was Microsoft announcing huge profits there would be a furore from the anti-Microsoft brigade, but not it seems when BT's does it.
OFCOM that toothless quango is certainly no use to the public and should be abolished.
Why is it no one questions the high cost of Broadband? (I am paying £27.00 per month), and I think that is too much.
I for one will not be celebrating BT's profit making, they should reduce their prices and their insane line rental charges.